What is the rate of return on investing in hotels?

Return on investment = average annual profit/total investment = (period profit/number of years)/total investment.

The return on investment of a hotel mainly depends on the room income. Different types of rooms have different prices. Except rooms, everything else is unprofitable. Investors must make a good budget before deciding whether to invest in order to avoid meager profits.

Compared with other types of investment, the hotel investment threshold is low and the competition is fierce, which is easy to cause market surplus. At this time, it is difficult to guarantee future earnings. When investing, you can choose a better brand to join, so that you can gain the trust of customers.

When investing in hotels, we should generally pay attention to the building area, the number of rooms, the total investment, the average occupancy rate and the average house price. When investing in the early stage, these projects must be explained in detail. Only in this way can we know the expected return after investment. If the investment cost is too high, we must be cautious.

Under normal circumstances, the hotel's return on investment:

About 35-40% a year. Of course, in the context of the epidemic, many people will be worried. In fact, from the relevant analysis report.

There are two points worth noting. First, a large number of domestic hotels were laid out by foreign investors last year, and many hotels were acquired and upgraded. In fact, this kind of bargain-hunting behavior is not difficult to understand. Foreign investment has long been optimistic about China's economy, China's epidemic prevention and control is effective, and consumption recovery is strong. These are all reasons for increasing foreign investment. On the contrary, domestic investment in the hotel industry showed an obvious downward trend last year.

Hotel investment can be divided into investment in real estate and investment in rental property decoration. The return on real estate investment is long-term. As a commercial real estate, the hotel has been operating for 40 years, and the golden harvest period of the hotel is 6 to 20 years after its opening. Hotel investment must have a necessary good foundation.

Including the hotel's equity capital accounts for 30% to 60% to avoid excessive debt repayment pressure, and the land cost accounts for 30% to 40% of the total investment to avoid excessive investment cost. It is normal for newly opened hotels to lose money in the first few years, because there is no condition to establish the hotel's popularity and implement the tourist market.